Grains Council: Japanese mills should recover within months
By JERRY HAGSTROM
Agricultural market analysts have issued conflicting reports on the prospects for U.S. sales to Japan following its earthquake, tsunami and nuclear power plant problems, but the U.S. Grains Council said it expects Japanese industry will be able to regain its normal feed mill production capacity within the next few months.
“Assuming significant escalation of the nuclear power plant issues will not arise and in spite of the horrendous losses suffered in Japan, the council believes the consumer demand in Japan will remain strong and will drive continued imports of U.S. coarse grains,” said Tommy Hamamoto, USGC director in Japan, in the group's Global Update report Thursday.
“In the short-term, logistical issues will continue to be a problem, but the Japanese feed industry is working hard to recover from the damage,” Hamamoto said. “By April or May, the council is hopeful Japan will recover and return to a somewhat normalcy.”
The council noted that four of Japan’s major importing facilities and attached feed mills were severely damaged by the earthquake and subsequent tsunami that struck Japan on March 11. These four facilities account for approximately 3.66 million metric tons of compound feed production per year – around 15 percent of Japan’s total annual compound feed production of 25 million tons.
Another mill, which accounts for an additional 15 percent, suffered some damage but compound feed production has already partially resumed.
“Japan is prepared to cover the feed loss by facilities coming back online and increased production in unaffected mills. These [unaffected] mills are sending feed supplies in small vessels to affected areas,” Hamamoto said. “There are currently bottlenecks: the capacity of unaffected ports to unload redirected shipments and storage limitations; impeded passage of ships through channels caused by debris in shipping lanes; increased transportation costs, fuel supplies and shortage of trucks and ships; and power needed for production and processing.”
The council also said it expects minimal animal losses because the majority of livestock and poultry farms are located in western Japan, not where the disasters have occurred in the northern and eastern part of the country.
But the council also noted that the logistics of fuels, feed and products continue to be a problem and that the Japanese Ministry of Agriculture and Fisheries released a notice alerting livestock farmers to be cautious and not to feed radioactive-material-contaminated hay, roughage, silage and water to livestock. The ministry also recommended that farmers keep their animals indoors, if possible.
Meanwhile, USDA’s Foreign Agricultural Service has reported that Japan’s rice stocks are high in proportion to consumption and are enough to feed the country for two to three months. The region affected by the earthquake produces one fifth of Japan's rice, but the disaster did not strike during the crop season, which begins with planting in April.
Any production losses in the impacted areas would be offset by production in other parts of the country, FAS said. The agency also said that the rice situation in Japan is unlikely to affect world rice trade.
Japan is the No. 1 export market for U.S. corn and pork, second for wheat and third for soybeans and beef, according to FAS. Under trade agreements, Japan imports some U.S. rice, but uses it for nonhuman consumption and food aid.
Agricultural market analysts have issued conflicting reports on the prospects for U.S. sales to Japan following its earthquake, tsunami and nuclear power plant problems, but the U.S. Grains Council said it expects Japanese industry will be able to regain its normal feed mill production capacity within the next few months.
“Assuming significant escalation of the nuclear power plant issues will not arise and in spite of the horrendous losses suffered in Japan, the council believes the consumer demand in Japan will remain strong and will drive continued imports of U.S. coarse grains,” said Tommy Hamamoto, USGC director in Japan, in the group's Global Update report Thursday.
“In the short-term, logistical issues will continue to be a problem, but the Japanese feed industry is working hard to recover from the damage,” Hamamoto said. “By April or May, the council is hopeful Japan will recover and return to a somewhat normalcy.”
The council noted that four of Japan’s major importing facilities and attached feed mills were severely damaged by the earthquake and subsequent tsunami that struck Japan on March 11. These four facilities account for approximately 3.66 million metric tons of compound feed production per year – around 15 percent of Japan’s total annual compound feed production of 25 million tons.
Another mill, which accounts for an additional 15 percent, suffered some damage but compound feed production has already partially resumed.
“Japan is prepared to cover the feed loss by facilities coming back online and increased production in unaffected mills. These [unaffected] mills are sending feed supplies in small vessels to affected areas,” Hamamoto said. “There are currently bottlenecks: the capacity of unaffected ports to unload redirected shipments and storage limitations; impeded passage of ships through channels caused by debris in shipping lanes; increased transportation costs, fuel supplies and shortage of trucks and ships; and power needed for production and processing.”
The council also said it expects minimal animal losses because the majority of livestock and poultry farms are located in western Japan, not where the disasters have occurred in the northern and eastern part of the country.
But the council also noted that the logistics of fuels, feed and products continue to be a problem and that the Japanese Ministry of Agriculture and Fisheries released a notice alerting livestock farmers to be cautious and not to feed radioactive-material-contaminated hay, roughage, silage and water to livestock. The ministry also recommended that farmers keep their animals indoors, if possible.
Meanwhile, USDA’s Foreign Agricultural Service has reported that Japan’s rice stocks are high in proportion to consumption and are enough to feed the country for two to three months. The region affected by the earthquake produces one fifth of Japan's rice, but the disaster did not strike during the crop season, which begins with planting in April.
Any production losses in the impacted areas would be offset by production in other parts of the country, FAS said. The agency also said that the rice situation in Japan is unlikely to affect world rice trade.
Japan is the No. 1 export market for U.S. corn and pork, second for wheat and third for soybeans and beef, according to FAS. Under trade agreements, Japan imports some U.S. rice, but uses it for nonhuman consumption and food aid.
